Ouke  University  Libraries 
Minority  report 
Conf  Pam  #288 


[House  ok   Representatives — Secret  Session.] 

HOUSE  OFxREPfJES^NTATTVES,  December   30th,    1863.— 
Ordered  to  be  printed.^  '     «-  . 

[By  Mr.  Bovce.] 


MINORITY  REPORT  ON  THE  CURIIENCY. 


As  I  am  unable  to  concur  with  the  majority  of  the  committee,  I  am 
compelled  to  submit  ray  own  views. 

It  is  admitted  by  all  that  the  currency  is  in  a  deplorable  Condition. 
It  is  depreciated  to  suclf  an  extent  that  the  Government  can  collect 
nothing  by  taxation  but  its  own  paper,  depreciated  as  compared  with 
specie  to  the  extent  of  tMo  thousand  per  cent.  Its  credit,  measured, 
as  it  must  be  by  the  depreciation  ofthe  currency,  is  almost  exhausted. 
Under  this  St:ite  of  affairs,  the  Government  is  in  a  condition  of  finan- 
cial paralyf'is.  It  can  ot  pay  its  armies  in  the  field,  except  in  worth- 
less paper.  It  cannot  pay  its  employees  It  cannot  purchase  sub« 
sistence  for  its  armies,  and  is  compelled,  to  prevent  their  disbanding 
from  starvation,  to  resort  to  the  odious  system  of  impressments,  which 
is  filling  the  land  ".ith  execrations.  It  is  evident,  therefore,  we  arc 
travelling  a  road,  which  is  leading  as  fast  ns  possible  to  a  precipice. 
We  must  get  out  of  this  road  as  quick  as  possible.  We  cannot  afford 
delays.  Present  action  is  imperative.  We  must  adopt  a  prompt  and 
elficacious  remedy.  We  must  gee  rid  of  the  8Ui),0()i),(M)()  of  treasury 
notes  which  block  up  our  way.  How  is  this  to  be  done  ?  I  propose 
to  do  it,  by  a  very  simple  process — by  recurring  to  the  truth — by 
realizing  that  they  are  depreciated — that  they  only  represent  a  value 
of  five  cents  on  the  dollar,  40, ')(»(>, UUO.  I  propose  that  they  be 
treated  by  the  Government,  in  all  its  dealings,  according  to  their  value 
m  specie.  I'hus  the  problem  is  solved  and  we  are  at  once  in  posses- 
sion of  our  resources. 

There  are  only  two  sources  by  which  the  Government  can  obtain 
values — one  by  credit,  the  other  by  taxation.  What  has  destroyed  our 
credit?  Setting  aside  the  prejudicial  influence  of  military  disasters, 
that  which,  in  my  opinion,  has  impaired  our  credit  more  than  all  other 
causes  combined,  is  the  magnituile  of  our  delt  and  the  velocity  with 
which  it  is  increasing.  A  debt  already  amounting  to  Sl,lUll,ii()i),UUO 
and  increasing  as  ours  is,  creates  universal  distrust  as  to  the  ability  or 


the  -willingness  of  the  country  to  pay  it.  I  hnow  that  the  opinion  is 
generally  expressed  that  our  loss  of  credit  is  owing  to  the  excessive 
issues  of  the  currency,  more  than  is  necessary  as  a  circulating 
medium.  But  that  this  opinion  is  erroneous!,  is  obvious,  from  this 
fact,  that  the  bond  debt  is  of  as  little  value  as  the  notes  in  circula- 
tion, which  is  evident  from  the  fact  that  the  currency  is  not. funded  in 
bonds,  which  the  holders  have  had  constantly  the  privilege  of  doing. 
If  the  bonds  were  more  valuable  than  the  treasury  notes  in  circula- 
tion, the  holders  Avould  have  funded  them  in  bonds.  The  bonds  and 
the  currency  are  alike  depreciated.  To  restore  our  credit,  we  must 
reduce  the  amount  of  our  debt^  and  arrest  its  gigantic  increase.  The 
plan  which  I  propose  accomplishes  both  of  these  purposes — reduction 
of  the  debt  and  slowness  of  its  future  increase,  more  effectually  than 
any  plan  proposed.  At  the  stroke  of  a  pen,  we  find,  by  reverting  to 
i-eality,  that  we  owe  41), 000, 000  outstanding  notes,  instead  of 
800,'JOO,000,  and,  as  I  shall  explain  in  a  subsequent  part  of  this 
report,  I  propose  to  place  the  Government  in  a  position  to  buy 
what  it  has  to  buy  as  cheaply  as  possible,  thus  arresting  the  velocity 
with  which  we  are  running  in  debt. 

But  our  great  resource  is  our  taxing  power.  The  great  desideratum 
for  us  is  to  get  the  most  efficient  use  of  this  power  with  the  least 
delay.  My  plan  accomplishes  this  purpose  more  completely  than  any 
other.  We  take  full  and  perfect  possession' of  our  taxing  power  at 
once,  with  no  incumbrance  except  the  :*s40.()0(),00i|  of  specie  value  in 
outstanding  treasury  notes,  which  we  could  rapidly  absorb  in  taxes. 
I  propose  that  the  taxes  shall  be  payable  in  specie  or  outstanding 
treasury  notes  at  their  specie  value.  But  to  avoid  the  difficulty  in 
[>aymeut  of  taxes  from  the  scarcity  of  specie  and  to  furnish  the  (lov- 
ernnient  with  present  means,  1  prepose  that  the  Treasury  Department 
issue  certificate  receivable  in  payment  of  the  taxes.  "With  these  certifi- 
cates the  Government  can  meet  its  present  wants.  I  propose  to  let  the 
Government  anticipate  the  taxes  for  two  years  by  issuing  certificates 
of  taxes  for  that  period.  These  certificates  supplying  tiie  office  of 
.specie  will  be  very  nearly  of  the  value  of  specie.  At  any  rate  no 
paper  obligation  we  can  issue  will  approximate  so  nearly  to  the  value 
of  specie  as  the  tax  certificates.  We  cease  the  indefinite  issue  of 
paper  and  confine  it  to  a  limited  amount  for  a  specific  purpose.  We 
concentrate  in  these  tax  certificates  the  total  financial  vitality  of  the 
Government.     When  we  have  done  this,  Ave   can   do  no  more  on  this 

line. 

As  taxation  alone  will  not  furnish  sufficient  means  to  carry  oq  the 
Government,  I  propose  to  give  the  Secretary  of  the  Treasury  author- 
ity to  issue  six  per  cent,  bonds,  strengthened  by  every  possible  appli- 
ance to  meet  the  deficiency.  Such,  in  brief,  are  the  outlines  of  ray 
plan. 

It  may  be  objected  that  it  is  unjust  to  the  holders  of  the  existing 
treasury  notes.  Undoubtedly  it  would  be  unjust  to  them  if  they  had 
received  their  treasury  notes  at  par.  But  such  is  not  the  case.  Very 
few,  if  any,  persons  hold  treasury  notes  which  they  received  at  par, 
because  persons  do  not  hoard  a  paper  currency,  which   is  constantly 


depreciating.  The  present  holders,  as  a  general  rule,  have  received 
treasury  notes  at  their  depreciated  rates.  The  injury  is,  therefore, 
more  apparent  than  real,  Avhen  we  propose  to  treat  the  notes  according 
to  their  actual  value.  The  holders  have  received  them  in  a  general 
sense  Avith  reference  to  their  real  value.  The  loss  incurred  by  the 
dejjreciatiou  of  tlie.^e  notes  has  already  been  experienced  by  those 
through  whose  hands  they  have  passed  The  present  holders  only  fail 
to  make  an  enormous  profit,  but  experience  only  *  small  loss.  It  is 
very  evident  that  th  re  is  no  way  by  which  we  can  can  get  rid  of  the 
outstanding  treasury  notes  with  so  little  individual  hardship  as  by 
taking  the  course  1  sujgost. 

It  may  be  further  objected  that  such  a  measure  as  I  propose  would 
jar  seriously  on  the  business  machinery  of  society.  But  it  does  not 
so  occur  to  me,  for  I  propose  to  make  no  change  in  the  value  of  the 
notes,  but  simply  to  recognize  the  fact  and  the  extent  of  their  depre- 
ciation. Thus,  business  arrangements  will  not  be  disturbed.  And 
when  we  consider  the  fact  that  there  are  very  few  executory  contracts 
based  on  the  existing  currency,  we  see  how  little  danger  there  is  of 
any  derangement  of  affairs. 

It  may  be  further  objected  that  what  I  propose  is  bankruptcy  of  the 
State.  If  this  be  so,  then  I  am  not  alarmed  at  even  this  borrible 
word.  I  put  it  on  the  ground  of  State  necessity.  We  cannot  stagger 
under  a  debt  of  §I.0()'.).O()ii,00(t  and  carry  on  the  war.  To  attempt 
to  do  this  is  to  sink  ourt-elves  in  a  Serbonian  bog,  from  which  we  can 
never  escape.  I  wish  the  Government  to  deal  candidly  with  the  peo- 
ple, to  make  known  our  necessities,  and  to  appeal  to  their  intelligence 
and  patriotism  to  sustain  us  in  a  measure  necessary  for  the  public 
safety.  But  I  deny  that,  in  a  just  sense,  what  I  propose  is  bank- 
ruptcy. We  have  issued  :$8iHi,()!l*^,(|()0  of  currency  payable  two  years 
after  the  war.  This  currency,  depreciated  to  such  an  extent  that  it  is 
worth  only  live  cents  in  specie  on  the  dollar,  is  now  a  millstone  around 
our  neck.  We  must  get  rid  of  it  at  once  ;  we  propose  to  deal  with  it 
according  to  its  real  value.  (?an  we,  in  the  eminent  danger  in  which 
we  find  ourselves,  in  which  our  success  depends  in  a  large  degree,  on 
our  financial  ability,  can  we.  I  say.  be  renuired  to  do  more  than  this  ? 
I  think  not. 

By  the  plan  which  I  propose,  we  put  ourselves  at  once  in  the  best 
financial  position  that  is  possible  to  us. 

We  vitalize  our  credit  to  the  maximum  extent,  because  we  at  once 
diminish  our  debt  to  its  maximum  limit. 

We  attain  instantly  the  fullest  possible  developement  of  our  taxing 
power.     We  get  actual  values. 

We  furnish  the  Government  with  the  means  of  paying  its  employees, 
and  its  army  it;  a  valuable  currency — an  advantage  which  can  scarce- 
ly be  over-rated;  for  a  Government  which  does  not  pay  its  army  or 
its  employees,  has  already  the  death-rattles  in  its  throat. 

Further,  we  give  the  Government  a  good  currency  with  which  it 
Cfin  buy  cheap.  We  arrest  the  velocity  with  which  our  debt  is  in- 
creasing. We  put  ourselves  as  nearly  as  possible  on  the  specie  basis. 
To  illustrate  the  advantages  of  this,  suppose  the  Government  carried 


on  upon  a  specie  basis,  and  that  its  annual  expenses  are  $200,000,000, 
and  its  taxation  amounts  to  half  this  sum ;  at  the  end  of  the  year  its 
debt  is  ^l(lii,tM!tiji(Hi.  Snppo'^e  the  same  Government,  carried  on 
upon  acurren;-y  inflated  four  hundred  percent,  by  excessive  issues 
of  paper  money  :  its  expenses  would  be  $8O0,00,0l)0,  its- receipts  from 
taxation  $4'H),()(>n,0!»;i.  ond  its  debt  at  the  end  of  the  year  would  be 
$4l/0,()iH),000.  By  adopting  my  plan,  we  would  put  the  (rovernment 
as  nearly  as  posKsbie  on  a  specie  basis,  the  .id vantages  of  which  [  have 
just  illustrated. 

I  further  propose  to  give  the  Secretary  of  the  Treasury  authority 
to  sell  cotton,  tobacco,  and  naval  stores,  to  strengthen  his  financial 
condition.  By  levying  a  tax  in  kind  on  these  leading  articles,  very 
considerable  values  might  bo  placed  in  the  hands  of  the  Secretary,  by 
which  he  might  retire  tax  ceitificates,  if  ^hey  exhibited  a  tendency  T() 
depieciation,  or  supply  himself  with  tax  certificiite^  ii  rlu'  Tic-^^sny 
became  pressed  for  means. 

All  of  which  is  respectfully  submitted. 

WILLIAM  W.  BOYCE,  Chavnncn. 


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